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If you are thinking about running IBM's systems, database, or middleware software on one of Intel's new "Nehalem EP" Xeon 3500 or 5000 series chips, brace yourself for some price increases.

For nearly three years, IBM has been selling selected software from its Software Group on various server platforms on a quasi-performance-related pricing scheme based on something called Processor Value Units, which might as well be called "We Just Guessed" considering how much a PVU has to do with the actual performance of the processors upon which the software is supposedly priced.

This week, IBM announced PVU ratings for the new quad-core Xeon 3500 processors, which are put into single-socket boxes, as well as on the Xeon 5500s, which are low-speed dual-core and higher-speed quad-core chips designed for two-socket machines. As we have been reporting, the performance improvement for servers using Nehalem EP chips can be as high as twice that as the quad-core Xeon 5400 processors they replace - provided you do some application tuning and recompiling - and can rival the performance of four-socket server using Intel's six-core "Dunnington" Xeon 7400 processors.

Given all this, you would think that IBM's PVU rating for the Nehalem EPs would be twice that of the Xeon 5400s. Ah, but it's not that simple. In some ways, what IBM has done is more fair than that and, in others, less fair.

The point behind the PVU scheme is to lump processor types and families together and give them a single rating so IBM's Software Group sales people don't have to resort to performance benchmarks to price the company's software. Simplification is good for sales people. And thus far, it has been good for companies using Intel's Xeon x64 chips as well as Advanced Micro Devices' Opteron equivalents.

<p.All Xeons and all Opterons were rated at 50 PVUs per core, regardless of core speed. That is certainly attractive compared to IBM's dual-core Power6 processors used in midrange and high-end AIX, Linux, and i platforms or the quad-core z10 processors, which are rated at 120 PVUs per core. But with the Nehalem EPs, the PVU ratings have been kicked up to 70 per core, and that represents a 40 per cent increase in software costs for customers that migrate software from earlier Xeons or Opterons to the new Nehalem EPs.